Insiders the biggest winners as Arqit Quantum Inc.'s (NASDAQ:ARQQ) market cap rises to US$100m

Key Insights

• Significant insider control over Arqit Quantum implies vested interests in company growth
• A total of 2 investors have a majority stake in the company with 54% ownership
• Institutions own 10% of Arqit Quantum

Every investor in Arqit Quantum Inc. (NASDAQ:ARQQ) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 54% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit US$100m market cap following a 51% gain in the stock.

Let's delve deeper into each type of owner of Arqit Quantum, beginning with the chart below.

Check out our latest analysis for Arqit Quantum

What Does The Institutional Ownership Tell Us About Arqit Quantum?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Arqit Quantum already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Arqit Quantum, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Arqit Quantum. Manfredi D’Ovidio is currently the company's largest shareholder with 47% of shares outstanding. D2bw Limited is the second largest shareholder owning 6.8% of common stock, and Liberum Capital Limited, Asset Management Arm holds about 5.9% of the company stock.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Arqit Quantum

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems that insiders own more than half the Arqit Quantum Inc. stock. This gives them a lot of power. That means they own US$54m worth of shares in the US$100m company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 29% stake in Arqit Quantum. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 6.8%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Arqit Quantum better, we need to consider many other factors. Case in point: We've spotted 4 warning signs for Arqit Quantum you should be aware of, and 3 of them are a bit unpleasant.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.